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Commercial

Litigation Funders Move Toward Indian Market

Litigation Finance is already booming in the United States, UK, Australia, and elsewhere. India has yet to really take advantage of the practice. But that may be about to change. Reuters explains that several top funders including Omni Bridgeway, the second-largest litigation funder, are setting up operations in India. According to Omni Bridgeway CIO Tom Glasgow, the firm is already speaking to potential clients. Glasgow didn’t reveal who, but talks about de-risking and monetization are underway. The expectation is that funders will focus on international arbitration due to the short resolution time compared to other types of cases. Once funders are well-versed in local issues, it’s likely that funding for local cases in India will follow. Also on the horizon is an Indian Association for Litigation Finance, which will include input from Marsh, Omni Bridgeway, and Phoenix Advisors among others. Like the ILFA, the group plans to advocate for the industry and create a means for self-regulation of litigation funding.
Announcements Commercial

Therium’s Financial Commitments To Access To Justice Causes Surpass £1.7m

Jersey, 15th December 2020: Therium Access, the not-for-profit arm of global litigation funder Therium Capital Management, has announced the recipients of its latest grant round. The Autumn 2020 grants have been awarded to six organisations and brings the total number of organisations receiving grants to 32 with over £1.7m committed since its inception in 2019.

The Autumn 2020 grant round remained focused on the issues exacerbated by the Covid-19 pandemic, with a focus on supporting work which is difficult to find funding for elsewhere, scalable delivery models, preservation of legal specialisation and work of strategic importance. Areas of law such as employment and housing were focussed on as these services face a huge surge in demand. Issues facing vulnerable young people were also prioritised.

As the Covid-19 pandemic continues into 2021, these organisations will continue to serve as a lifeline to the most vulnerable and marginalised in society. Additional grants have been awarded to two current grantees.

The recipients of the Therium Access Autumn 2020 grant round are:

  • Bristol Law Centre: The grant will increase capacity in employment and housing, enabling Bristol Law Centre to deliver a full service including complex advice and casework, in a wider geographical area without the limitations of Legal Aid work.
  • Child Poverty Action Group: The grant is for the continuation of funding for a solicitor in the charity’s strategic litigation team and other various costs as it continues to promote and protect the rights of children and families and maximise family incomes.
  • Legal Action Group: The grant is for a new Housing Possession Duty Desk: a practical guide. The Guide will provide a practical, accessible and affordable source of information for advisers at Housing Possession Court Duty Schemes.
  • Project for the Registration of Children as British Citizens: The grant is towards PRCBC’s core costs to support delivery of their pro bono strategic casework that ensures young people are aware of and able to exercise their rights to British citizenship.
  • South West London Law Centre: This grant will fund a Housing Court Crisis Navigator who will give practical help and support to deal with the underlying issues of people seen by their housing and debt teams in Croydon.
  • Youth Legal: The grant is for the salary and associated costs of a part-time Development worker to support Youth Legal’s vital work and to reach out to their communities, develop strong networks, and coordinate projects.

Jeunesse Mensier, Grant Programme Director at Therium Access, said: “Our Autumn 2020 grant round has again shown us the excellent and necessary work that organisations and individuals provide across the country in facilitating access to justice. We are so pleased to be supporting these six impressive and inspiring organisations which help some of the most vulnerable in our society in the areas of citizenship, employment and housing.”

Lord Falconer, Chairman of Therium Access Advisory Committee said: “During such a difficult time, legal advice has never been more important. It’s so brilliant to see Therium Access lead the way and provide much-needed financial support to such worthy organisations that provide free legal advice to strive and reduce the ever-increasing justice gap. We look forward to seeing other funders follow suit.”

Solange Valdez-Symonds, Solicitor and Director of Project for the Registration of Children as British Citizens said: “PRCBC’s core activity is assisting, including by litigation, children and young people to secure their rights to British citizenship. This grant from Therium Access is vital for our continued ability to deliver on this - and not only to directly assist more children and young people. It enables us to bring our expertise and experience to bear in challenging the several injustices in policy and practice that deprive so many more children and young people of the security and recognition that is theirs by right through registration of citizenship. Thank you Therium Access.”

Louisa McGeehan, Director of Policy at Child Poverty Action Group said: “Funding from Therium Access Fund for a further year will enable us to continue our award-winning work in ensuring low-income families have access to justice.  The need is greater than ever given the unprecedented number of families claiming universal credit as a result of the Covid-19 pandemic. renewed funding will help us in our ongoing work of ensuring that laws relating to social security entitlement are made and applied in compliance with fundamental rule of law requirements and that ordinary individuals will be able to hold the government to account when this is not the case.”

Applications for the Spring 2021 grant round will close on 15th April 2021 with priorities being confirmed in early 2021.

About Therium Access:

Therium Access is the primary expression of Therium’s corporate and social responsibility programme. Therium Access dispenses with the criteria of funding for profit and has the sole purpose of facilitating access to justice.  Therium Access is a mark of Therium’s wider commitment to the pursuit of justice and the rule of law.

Therium Access accepts applications from charities and other entities whose services and projects facilitate access to justice or from those seeking assistance to obtain legal representation on cases (including defence) which have strategic importance. The applicant’s need and the impact of the grant will be important factors in our review process. The deadline for the submission of the next round of grant applications is 15 April 2021. In addition, urgent applications may be considered on an ad hoc basis. Applications need to be made by legal representatives or the entity seeking a grant.  The board of Therium Access is assisted by an Advisory Committee which is chaired by Lord Falconer, former Lord Chancellor, Secretary of State for Constitutional Affairs and Secretary of State for Justice.

Therium Access aims to support access to justice in the broadest terms and considers applications that further the following causes (in no particular order):

  • The right to legal representation or due process;
  • The proper and efficient administration of justice;
  • The advancement of human rights;
  • The promotion of equality of rights and diversity;
  • The protection of children, the elderly, the disabled, minorities, asylum seekers and other vulnerable or disadvantaged groups;
  • The advancement of environmental protection or improvement;
  • The promotion of legal education that furthers the causes listed above; and
  • Any other case or project in which a person, group, or entity will not have access to justice without financial assistance.

Therium Access is intended to be a global initiative. Its initial focus is on the UK and it will be rolled out in other jurisdictions in a number of planned phases.

About Therium Capital Management:

Therium is a leading provider of investment capital to the legal industry and one of the largest, having raised over $1 bn since 2009.  With investment teams in the UK, USA, Australia, Germany and Norway, Therium has funded litigation and arbitration claims exceeding $40 billion including many of the largest and most high profile funded cases in the UK and internationally, including arbitrations under rules of the LCIA, ICC, UNCITRAL, LMAA, AAA, CIETAC, ICSID, Stockholm Chamber of Commerce and the Energy Charter Treaty.  Therium has been Top Ranked by Chambers and Partners and Leaders League with investment officers across the UK, Europe, USA and Asia Pac recognised as leading individuals in litigation finance.

Last year to mark the firm’s tenth anniversary, Therium Access was launched as a not-for-profit venture to fund a wide range of access to justice projects and cases – supporting the most vulnerable in our society and helping to bridge the widening justice gap. With its own board composed of eminent figures from the legal community and a dedicated grants officer, Therium Access has made over £1.7 m in financial commitments over the last 22 months to over 32 different organisations. As the first initiative of its kind, Therium has been shortlisted for several awards for launching this ground-breaking initiative, including the FT Innovative Lawyer Awards 2019, the Lexis Nexis Awards 2020 and The Lawyer Awards 2020.

Therium also invests in AI and software projects to accelerate the advancement of the industry. As a founding member of both the ALF, ILFA and the Litigation Funding Working Group, Therium is also committed to shaping the future of legal finance and setting high standards for the industry.

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Commercial

IPO Wealth Class Action Targets Trustee

A class action involving IPO Wealth is proceeding in a Victoria Federal Court. The case was filed against Vasco Trustees and names associated company DH Flinders. Law firm Slater and Gordon is running the class action. Australian Financial Review details that the IPO Wealth Fund was the debut product of Mayfair 101, an upstart investment firm. Earlier this year, two other Mayfair 101 entities have also had their assets frozen. The class action currently involves more than 50 investors, including several retirees or those who invested workers comp monies. While the fund was reserved for investors with high net assets—the investors in question were largely inexperienced. The lead plaintiff, Helen Batey-Smith, put $1 million into the fund as of November 2018. She rolled it over multiple times until the investment was frozen. In the claim, some aspects of the promotional material are at issue—including eye-catching declarations of “attractive returns” and the phrase “term deposit.” This seemed, to some, deliberately intended to obfuscate or mislead investors. A memorandum on the fund released between 2017-2019 omitted the significant risk of the fund’s underlying investment. Vasco should have known (or did know) that the investments were speculative at best. Mayfair 101 insists that they have not broken any laws but nor would they comment on the accusations regarding advertising. Similar cases have been adjudicated recently in the investor’s favor. However, litigation funding firms and legal fees absorbed much of the settlements. This new class action is not utilizing litigation funding.
Consumer

‘Real Housewives’ Husband Held in Contempt Over Missing Settlement Payouts

The husband of reality TV star Erika Jayne is being held in civil contempt along with his law firm. A federal judge in a Chicago court made the decision after Thomas Girardi and the Girardi Keese law firm failed to identify the whereabouts of more than $2 million in payments for survivors and family of the Lion Air Flight 610 plane crash. Chicago Sun-Times explains that Judge Thomas Durkin froze the assets of the lawyer and his firm. He then affirmed that payment to at least four families owed half a million dollars would cure the situation. Girardi is also being sued by multiple litigation finance firms over non-payment and leaving funding contracts unfulfilled. He and his wife are accused of embezzling settlement money in order to maintain the appearance of being wealthy celebrities. The couple, ostensibly in the midst of a divorce, claims to be staring at ever-growing debt. It’s been alleged that the couple misdirected large amounts of money from both funders and clients for their own personal use. Jayne herself describes the case as “high drama.”
Commercial

Canterbury Class Action Against Southern Response Launches

Policyholders with Southern Response got a rare bit of good news as their class action against the insurer was launched. New Zealand’s top litigation funder, LPF, will provide financial support for the action. Those homeowners who were insured by Southern Response and made a claim after their home was damaged in the earthquake are eligible for inclusion—if their settlement was lower than it should have been. Scoop reports that roughly 3,000 homeowners were allegedly shorted by the insurer in settlements related to the Canterbury earthquakes. This new class action is an alternative to an earlier claim—run by GCA lawyers and funded by Claims Funding Australia. A recent opt-out ruling could lead to claimants becoming part of the GCA lawyers class action, which carries high fees. This new class action carries no success fees and is free to sign onto. Funders will receive a max payout of 15% of the award if the case is successful. If the case is resolved successfully within two years, and costs are under $2 million, LPF Group will get 10% of the settlement. If it takes longer though or costs more, the 15% return will come into play.
Commercial

Mastercard Case Moves Forward as UK Inches Toward US-Style Class Actions

Litigation Finance received a holiday gift in the form of a new UK Supreme Court decision allowing a GBP 14 billion case to proceed against credit giant Mastercard. The claim, which could involve over 46 million claimants, alleges that the credit card group charged excessively high fees and overcharged customers regularly. Proactive Investors explains that the ruling opens the door to a bevy of new collective claims. A similar claim was filed last year against five big banks alleging price manipulation. Many have presumed that litigation funders are salivating at this news. Neil Purslow, CIO of Therium Capital, has stated that Therium will be making investments in these types of cases as a result of this ruling.
Commercial

Arbitration Against Tanzanian Government Begins

Indiana Resources, an ASX-listed gold mining company in Australia, is proceeding with its case against the Government of Tanzania. The case involves the alleged illegal expropriation of a nickel mining project. The action is led by two incorporated UK companies: Ntaka Nickel Holdings, and Nachingwea UK. Mining Review explains that the case, which is funded by Litigation Capital Management, is expected to convene in the first quarter of next year. An arbitral tribunal will be appointed, followed by filing the claimant’s evidence and supporting documents. Original estimates of losses are close to $1 billion. The government of Tanzania has allegedly been reticent to participate in every step of the process. Plaintiffs claim they refused to come to the negotiation table when claimants invited them to negotiate in good faith, and that they refused to engage concerning the formation of the tribunal. Bronwyn Barnes, executive chair at Indiana Resources has stated that she is pleased to see such progress in recent months. She goes on to affirm that there is adequate litigation funding in place and that the memorial is well underway. According to Barnes, $95 million is the minimum claim for expected compensation.
Commercial

Litigation Funding Ethics in the US

The Third Annual Ethics Summit from Frankfurt Kurnit was held last month. The litigation funding panel covered a host of ethical and legal points of interest. These include coverage of the back-and-forth between the industry and the NYC Bar Association, and the ever-evolving rules of professional ethics. MONDAQ begins with an overview of the practice of Litigation Finance, including the non-recourse nature of funding and how it differs from traditional loans. This detailed the many advantages of litigation funding, including helping average citizens see their day in court without financial barriers. It also affirmed the risks—such as pushing the boundaries of attorney-client privilege, or funders attempting to make decisions about the cases they fund. The NYC Bar Association turned heads in 2018 when they asserted that Rule 5.4a disallows fee-sharing with non-lawyers—and therefore renders litigation finance prohibited. This stance has been debated, sometimes vehemently, by legal professionals. However, the opinion is not law, and litigation funding agreements have not changed because of it. The question of disclosure remains in flux. How much should a lawyer tell a potential funder? What should they be obligated to reveal? This is especially relevant in single-case funding. It only makes sense that funders want details to properly vet cases they fund, but the question of what they’re legally entitled to know remains up in the air.   When states refine professional ethics and rules regarding litigation funding, they help ordinary citizens gain access to the justice system. While questions about disclosure and privilege remain, it cannot be denied that anyone who has been wronged deserves their day in court. Further, it should not be denied that litigation funding is the most effective way to secure the rights of citizens to pursue a case even when they lack the financial resources to do so.
Commercial

Insights into Funding International Collective Proceedings

The first day of the Global Class Actions Symposium brought with it new considerations for claims filed in the US and EU. In the United States, champerty is still an issue, as nearly half of all states do not allow the practice of Litigation Finance. Some have even said that regulatory trends are moving in two directions at once—with some seeking to restrict or heavily regulate the use of litigation funding, and others laying the groundwork for its mainstream acceptance. ISLG explains that regulatory developments are often focused on changes within the industry, and mitigating their impact. In the last few years, litigation funding has shifted from funding single large cases, often class actions, to portfolio funding. This reduces risk for funders while helping legal firms manage budgets. Some have suggested that this funder-friendly approach is incongruous with the foundational concept of Litigation Finance—increasing access to justice. Disclosure is an ongoing sticking point in litigation funding, as is the fear that funders will hold sway over decision-making in the cases they fund. This, despite existing law typically requiring that funders not control any aspect of the case. In the EU, class action cases are called ‘collective redress’. The EU is expected to strengthen the laws that impact such actions. Typically, the use of litigation funding must be disclosed to the courts, regardless of which side is utilizing it. Meanwhile in Germany, Litigation Finance has been legal since 1999, but it has never gained the popularity it has elsewhere. Day one of the symposium concluded with Melissa Ferrari, president of Verein Global Justice Network, who affirmed the importance of funders not controlling any aspect of a funded case.
Commercial

Eni Will Issue Subpoenas on Nigerian Litigation Funding Arrangements

Eni, the Italian energy company, was recently given court approval to subpoena companies accused of taking part in the Nigeria OPL 245 scandal. This is expected to include asset recovery companies as well as litigation funders. Previously, Eni suggested that the government had taken action under pressure from third parties who are hoping to profit illegally. Premium Times reports that there are seven companies involved, including Poplar Falls LLC, and six Drumcliffe Partners entities, based in Delaware USA. The subpoenas are not expected to require the release of privileged documents. The evidence sought by Eni was largely unattainable by any other method, which is why court assistance was necessary. Eni insists that their request was not intended to circumvent existing restrictions or policies on gathering evidence. In fact, the discovery sought by Eni is narrow and non-intrusive. The scandal itself involves the former oil minister of Nigeria, Dan Etete. Etete is accused of controlling accounts that received more than a billion dollars from Eni and Shell—both multinational oil giants. From those accounts, over $500 million was transferred to accounts controlled by Etete, and Abubakar Aliyu—the owner of AA oil. This 2011 transaction was authorized through several ministers of the Nigerian cabinet, ostensibly as payment for OPL 245—one of the richest oil blocks in Nigeria. Initially, both Eni and Shell stated that they were unaware that the money would go to Etete and his associates. Evidence showing that claim to be false was eventually revealed—as Shell eventually affirmed. Currently, Etete, Shell, Eni, and several oil company officials are being prosecuted in Italy for their alleged roles in this scandal. The deadline to comply with subpoenas will be 30 days from the date it is served.
Commercial

New Scholarship for ASU Law Students Announced by Pravati Capital

Scottsdale, Arizona’s leading litigation finance and consulting firm has established a scholarship in support of gifted students. The scholarship will go to exceptional students attending Sandra Day O’Connor College of Law at Arizona State University. ASU reveals that the Pravati Capital Endowed Scholarship is part of the Dean’s Circle for donors, in support of law students looking for mentorship and networking opportunities. It also provides financial support to gifted students, including those attending ASU on campuses in LA, Washington DC, and downtown Phoenix. Dean of Law at ASU, Douglas Sylvester, stated that they are grateful for such a generous donation and that the money will be used to continue to provide a first-rate law school experience for students. Pravati Capital provides litigation funding to firms on a non-recourse basis.
Commercial

Therium Capital: Identifying Claims

 In an insolvency situation, a company and its legal department will have to structure an affirmative recovery program. After that comes building a framework to identify claims they’ll pursue. In this process, understanding potential claims and being aware that an affirmative recovery program is underway are both critical. That’s why keeping everyone in the loop is essential. Therium Capital explains that how effective an affirmative recovery program is will depend largely on how well the company understands available claims. In-house legal teams can be instrumental in bringing in new claims proactively. Potential recoveries can arise from a variety of opportunities including insurance claims, IP usage, and commercial contracts. It’s vital that business units and legal teams all understand which claims are worth pursuing. Ultimately though, general counsel will make the final determinations. Any employee can serve as the eyes and ears of the legal department if they’re properly trained and motivated to do so. Relationship building, education, corporate culture, and employee incentive programs can all play a part in a successful affirmative recovery program.
Commercial

Temur Akhmedov Reportedly Lost $50 Million in High-Risk Trades

Infighting among members of the Akhmedov family continues, as divorcee Tatiana Akhmedova continues to accuse her son of hiding assets. Temur Akhmedov, London oil trader and son of Farkhad Akhmedov, denies that he hid money from his mother. City AM reports that the younger Akhmedov recently stated that while he was studying at the London School of Economics, he engaged in several risky trades. He claims to have ultimately lost more than $50 million. This was revealed during a London court case over the disbursement of a 2016 divorce settlement. Burford Capital is funding Akhmedova’s case.
Litigation Finance News
Announcements Commercial Special Features

LFJ to Host Special Digital Conference on Commercial Litigation Funding

2020 was a pivotal year for commercial litigation funding, and the industry approaches 2021 on the cusp of massive growth. Litigation Finance Journal is hosting a special digital conference which will cover the most impactful stories of the past year, and offer insights into what next year will bring. This special one-hour panel discussion and Q&A will explore the major events of the past 12 months, including the Omni/IMF merger, the founding of the ILFA, industry innovation (corporate portfolio funding and financing M&A transactions) and more. Our panel of industry experts will also offer their views on what's in store for 2021 and beyond.

Moderator

Ed Truant Founder Slingshot Capital

Panelists

Andrew Saker CEO Omni Bridgeway

  Neil Purslow Co-Founder Therium Capital Management

   Nick Rowles-Davies Executive Vice Chairman LCM

The event will be held on Thursday, December 17th at 5pm ET. It will be audio-only, and comprise a 45-min panel discussion, followed by a 15-min Q&A with attendees. Tickets can be found here. Anyone who purchases a ticket will receive a recording of the event; it is not necessary to attend to receive the recording.  Questions? Write to: jfreund@litigationfinancejournal.com Hope you enjoy the event! - The LFJ Team
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Commercial

Mara Abols Joins Omni Bridgeway as Corporate Counsel in Toronto

The Omni Bridgeway Toronto team grows larger with the addition of Mara Abols. She’ll be serving as a member of the Legal, Risk, and Compliance team, which handles global legal issues. Omni Bridgeway details that Abols will negotiate, advise, and draft litigation funding agreements as well as focus on corporate legal issues. Abols is an excellent fit for a company that has grown in size and number of deals in recent years. Abols is a bar member in Ontario and New York, and graduated with distinction from McGill University. She was also part of an International Exchange with the University of Copenhagen.
Commercial

Blackmore Bonds Pursues Suit Against Insurers Accused of Failing to Pay Out

Two insurers have been accused of wrongdoing by Blackmore Bonds after refusing to pay out to bondholders. Bondholders are guaranteed by law to receive shortfalls if the company becomes insolvent. They have stated the likelihood of legal proceedings in order to force payment. International Adviser explains that a formal demand for payment was made in April of this year, but no payments have thus far been made. While litigation is proceeding, it’s expected to be expensive and lengthy. As such, the trustee is said to be seeking out litigation funding to finance the case. In the meantime, bondholders have been told to expect substantial shortfalls.
Commercial

Ukrainian Airlines Class Action Granted Carriage

A class action brought by plaintiff Omid Arsalani has been granted carriage by the Ontario Superior Court of Justice. The case is in relation to the downing of Ukraine International Airlines Flight PS752 on January 8th. Law Times News details that two plaintiffs who filed similar but separate actions, had each tried to stay the other action—and that another action was also filed by an additional two potential plaintiffs. In determining which case would receive carriage, the judge considered the quality of counsel, the chances of success in the case, litigation funding, and proposed case theory. In addition to carriage, Arsalani’s action is being funded by Galactic Litigation Partners LLC. The funding agreement has been approved by the courts as of September of this year. Those who led the other cases were informed that they could not file for a new class action—but could pursue individual cases relating to the downed plane.
Announcements Commercial

Winshear Gold Secures Funding for Legal Proceedings Against the Government of Tanzania

Winshear Gold Corp. (TSX-V: WINS) ("Winshear" or the "Company") provides the following update on arbitration activities related to the expropriation of the SMP Gold Project (the “Project”) by the Government of Tanzania.

Winshear is pleased to advise that it has completed a Litigation Funding Agreement (the “Agreement”) with an affiliate of the Litigation Funder. The Agreement provides for funds to be drawn from a financing facility to meet all fees and expenses relating to the pursuit of certain claims against the Government of Tanzania for the illegal expropriation and loss of the SMP Gold Project, including all costs associated with legal proceedings, media/public relations, geopolitical efforts, and, if necessary, enforcement, of any awards.

Mark Sander, President of Winshear Gold, commented, “Winshear’s legal representatives, Lalive, backed by the financial support of the Litigation Funder, have been engaged to aggressively pursue compensation for the illegal activities of the Government of Tanzania in expropriating the SMP Gold Project. Lalive is highly experienced in arbitration cases in Tanzania with a track record of success for its clients.”

Background information on the arbitration case is contained in Winshear’s press releases of:

  • January 10, 2020, which announced delivery of the required 180-day notice of intent to file arbitration proceedings to the Attorney General of Tanzania; and
  • July 14, 2020, which announced the commencement of international arbitration proceedings after the 180-day notice period had expired without response from the Government of Tanzania.

Compensation being sought for expropriation of the SMP Gold Project may include, but will not be limited to, the value of the historic investment made by Winshear in Tanzania, the value of the project at the time that tenure was expropriated and damages the Company has suffered as a result of Tanzania’s acts and omissions.

The Company is not able to make any comment in relation to the potential quantum of any claim for compensation at this point.

ON BEHALF OF THE BOARD OF DIRECTORS “Mark Sander” Dr. Mark V. Sander President

For more information, please contact Irene Dorsman at (604) 210-8751 or visit www.winshear.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautions Regarding Forward-Looking Statements

This news release includes certain statements and information that may contain forward-looking information within the meaning of applicable Canadian securities laws.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as “intends” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or “occur”. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including the risks normally involved in the exploration, development and mining business or as may be otherwise set out in the Company’s filings with Canadian securities regulatory agencies. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.

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Commercial

New Zealand Law Commission in Favor of Litigation Funding

Recommendations from the New Zealand Law Commission include strong support for litigation funding as well as advocating for a strong class action regime. Meanwhile, insurance companies are among those are expected to balk at any new policies making class action suits more common. Newsroom New Zealand reports that the paper released by the commission affirmed that there has not been a consensus on the desirability or use of litigation funding, or class action cases in general. In fact, existing NZ rules on class actions date back to 1882. Amokura Kawharu, president of the commission, affirms that cost is the main barrier to taking meritorious cases to court. She explains that class actions improve access to justice while setting up a mechanism that encourages companies to obey the law and treat citizens fairly. Litigation Finance helps in these endeavors by removing the obstacles that inhibit access to justice. In the absence of a statutory regime, class actions can be a difficult endeavor. Insurance companies are particularly opposed to allowing litigation funders to get involved with class action participants. According to the Law Commission papers, current shortcomings in the current class action process can be best addressed with the new legislation. At the same time, the report acknowledges that making class action suits easier is likely to create more of them. One lawyer makes the claim that US “commonplace” class actions feature claims lacking in merit. Many contest this, especially since no competent litigation funder wants to back a case without merit. Still, there is a demonstrable uptick of class actions in Australia since litigation funding became more mainstream. This is only expected to worsen due to COVID business closures, supply disruptions, and contract disputes. A final report will be given to the Minister of Justice before May of 2022. The goal is to finalize class action and litigation funding laws before the next wave of new COVID-related cases.
Commercial

Dechert Report Foretells Sharp Rise in Securities Litigation

In an already difficult year for companies around the world, a new report from global firm Dechert tells us to expect even more hardship. A new report predicts that both the number of settlements and the final settlement sizes are expected to rise significantly. Global Legal Post details that as global securities litigation evolves, companies that cross borders should be ready for a rush of securities class actions—in the US and globally. Some jurisdictions, Singapore for example, are expected to be hot spots for incoming litigation. Part of what’s inspiring the rise in cases is the mainstreaming of third-party litigation funding. There’s concern about the control that funders may have over the litigation process, even though most countries specifically prohibit funders from taking control over decision making in the cases they fund. A newly formed professional group, the ILFA, intends to advocate for the industry while educating and strengthening the rules that govern the practice.
Commercial

Gerchen and Hammes Seek Out Targets for Acquisition

Adam Gerchen, whose 2016 sale of his litigation finance company to Burford Capital made waves, is at it again. This time with partner Jeffrey Hammes (formerly of Kirkland & Ellis) and their special purpose acquisition company. The pair are looking for a new acquisition thanks to an IPO over-allotment of $175 million. Law.com explains that the team is looking at two dozen targets, and plans to buy one worth roughly 4-5 times the capital they’ve raised. These companies range from legal technology, governance, and risk/compliance, and are mostly located in and around Chicago. Gerchen details that the current financial instability in global markets makes this the perfect time for SPACs to facilitate consolidation in multiple industries. He describes the process as a private equity fund with a single donor. One company becomes the platform, and then after acquisition, others can be brought in. Once transactions are completed, growth is facilitated. Gerchen is clear in saying that his SPAC adds qualitative and quantitative value.
Commercial Special Features

Clarifying the Ethics and Responsibilities Inherent in Litigation Funding

The following is a contributed piece from Nick Rowles-Davies, Executive Vice Chairman of Litigation Capital Management. Along with Andrew Saker, CEO of Omni Bridgeway, and Neil Purslow, Co-Founder of Therium, Nick will be a panelist on LFJ's upcoming special digital conference -- an industry roundup of the major events impacting commercial litigation funding in 2020, and what to expect in 2021.  Recently, there has been a lot of discussion around litigation finance. This is generally a good thing, as although litigation finance is no longer an unknown dark art, the industry still benefits from a heightened profile as it progresses on the journey from obscure to mainstream. That said, recent theoretical musings have concerned the ethics surrounding a funder’s involvement in a case, some funders’ closer associations with law firms and the duties of the lawyers running funded cases. These are important issues that should be discussed and debated openly, albeit more usefully by practitioners and funders who have real experience of such matters in jurisdictions where funding is permitted, so as to avoid naïve commentary that betrays a lack of practical knowledge and understanding of how these matters actually work. One issue raised recently is the concern that using funding can create a conflict between the duties of the lawyer to their client and any duty to the funder. There is a suggestion that in this regard, funders create a ‘practical difficulty’ for lawyers, who are torn between protecting the interests of their clients and pleasing investors. The only duty of the lawyers in a matter which is financed by a third-party funder is always the one to their client. Professional funders invariably include a provision within their funding agreements that requires the lawyers to act in accordance with their professional duties and any regulatory requirements. That said, the practical reality is that any professional funder will wish to ensure that the interests of the client and the funder are entirely aligned. No funder wants to create a situation where the client has little or nothing to gain from the outcome of the case. The simple reason for this is that the funder does not influence or control the decision making in the litigation or arbitration. They cannot, and attempting to do so would put the funder’s investment at risk. Funders provide passive capital and once they have decided to invest in a case there are only certain circumstances where a withdrawal from the case is permitted. In reality, given the experience of the established professional funding cohort, most clients are keen to discuss their case with the funder in a way that seeks out the funder’s views and gives the client the benefit of the many years of experience that the funders have gained. Despite the suggested concerns, funders do only have a limited and pre-agreed role in any decision making, and the funding agreements reflect that position. It has also been suggested that clients should seek independent advice on the terms of the funding agreement, namely alternative advice from the lawyers running the actual case. That does happen, although it is not mandatory given that the parties are commercial entities seeking to enter into a commercial agreement, but then neither is it mandatory for a client entering into a DBA/contingency fee agreement with their lawyers in England and Wales. It has been observed that there are law firms who are forging closer links or associations with funders and whether that, also, raises questions of duty or loyalty. The commentary above is equally applicable to this. Lawyers know where their duty lies, and professional funders have no interest in interfering in that. Perhaps a more pertinent question is to ask why these associations are happening. Since the last financial crisis, the law firm model has been changing with corporate clients insisting on higher value and better predictability on fees. In a downward trend since 2008, law firms have been losing out on collections on billable time. Moreover, the most important issue and the area that in house legal teams believe needs the most attention is the provision of more creative and alternative billing solutions.[1] One way in which law firms can offer an alternative is by the provision of litigation finance. Law firms that are forging closer associations with funders are showing that they understand their clients’ needs and are reacting to their clients’ requests by offering an alternative. The legal market is extremely competitive. It should be assumed that all the lawyers pitching commercial clients for work are very good lawyers. Law firms, particularly in the current financial climate, not only have to address the requirements of those commercial and corporate clients, but they need to set themselves apart from the competition. They need to change the narrative and distinguish themselves in a crowded market. The firms that have made such arrangements are benefitting from the ability to do this and are gaining more work from existing clients and winning new clients with the benefit of their associations with litigation funders. Used intelligently, litigation finance is an excellent business development tool for law firms. However, these associations go much further than simply being a response to in house corporate demands or the business development needs of law firms. The benefits to the law firms and to their clients are numerous, as they are of course to the funders. Nothing in these arrangements is, should be, or indeed could be, exclusive. The law firm should always act in the client’s best interests. Whilst the funder may see all of a firm’s potential funding opportunities, it is incumbent on the funder to create an arrangement that is always going to be competitive for the law firm’s clients. That is a significant benefit to all parties. The established professional funders consider every case on its own merit and risk profile and could not guarantee that they will always offer the cheapest terms – to do so would undermine one of the cardinal rules practiced by real funders, namely the pricing of risk. Accordingly, there will be occasions where the funder with whom the firm has an association cannot provide terms that meet the client’s demands for a particular case. Whilst the regular referral of cases is a benefit to the funder, there is real value to both funder and law firm in the knowledge and experience gained by working closely together, understanding the methodology and then adopting the processes and the thinking undertaken by the funders, even using similar terminology and document precedents. This exchange of information means that the law firm really understands what it takes to obtain approval for funding. That leads to a better result for clients. There is no time and money wasted in hopeless applications and cases that can be funded are executed more swiftly whilst those that cannot be funded rejected swiftly, or do not make it past the law firm’s triage process which has been honed by continued education from the funder. It is incumbent on any new industry to listen to concerns, ethical or otherwise, and respond with appropriate understanding and professionalism to address those concerns. All of the issues raised recently have been asked and answered many times before. The litigation finance industry has matured significantly in the last 10 years and is now treated, rightly, as a useful and often necessary tool in any disputes lawyer’s toolbox. The general international trend is one of growing acceptance, increasing adoption of, and accelerated adaptation to, litigation finance—particularly in sophisticated international hubs for dispute resolution.   [1] (2019 Report on the State Of The Legal Market by the Georgetown University Law Centre and Thomson Reuters Legal Executive Institute & Peer Monitor)
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Commercial

ASX Trading Outage Could Spark Class Action Suits

Noted class action firm Quinn Emanual Urquhart & Sullivan is reportedly investigating a recent ASX trading outage. Could this mean a class action is forthcoming on behalf of those impacted by the glitch? ASX has accepted responsibility for the occurrence, though it’s not clear what that acceptance means in a legal context. Sydney Morning Herald suggests that the firm is engaged in due diligence research on what they’ve called ‘a potential case,’ before seeking litigation funding. One partner, Damian Scattini, has stated that he believes there’s negligence afoot and said negligence led to significant losses for market participants. The average daily turnover on the ASX is reportedly over $4.5 billion. Scattini went on to say that the issue that caused the outage was “foreseeable,” and that ASX should make good. Some traders have already voiced their willingness to join the proposed class action. Gary Henderson, a 20-year-trader, claims to have lost nearly $8,000 on trades he could not complete that day. Henderson is not alone, as many traders and brokers have stated their disappointment and dissatisfaction for the record. Damian Scattini estimates that due diligence may take a few more weeks to complete, but that ASX could be served before Christmas.
Commercial

Ross v Southern Response Ruling May Foretell Increased Class Action Filings

Opt-out class actions will soon be the standard in New Zealand just as they are in Australia, thanks to a new Supreme Court ruling. A case involving Southern Response Earthquake Service Limited and a New Zealand couple has led to the ruling. The general legal thinking is that an opt-out standard improves access to justice. Law Fuel explains that the Supreme Court ruling affirms an earlier ruling from a lower court that had been appealed by Southern Response. Several prominent legal entities gave statements or submissions at the hearing, including the New Zealand Bar Association, New Zealand Law Society, and LPF Group—the largest litigation funder in New Zealand. In the original case, one couple—the Ross’s—sued Southern Response on the belief that they withheld information about repair and restoration costs in order to convince people to take a lower settlement. Part of the new ruling indicates that the Ross’s may accept or reject a settlement offer on behalf of other plaintiffs. Opt-out proceedings have been determined by the Supreme Court to be the best way to provide fast, fiscally sound access to justice. New Zealand courts may supervise settlements, and they are obligated to protect so-called absent plaintiffs—those participants who have not been active in the proceedings. According to the ruling, opt-out proceedings are most appropriate when it’s the approach preferred by the lead plaintiffs, in instances where most of the plaintiffs aren’t connected or part of a community, and in cases where all class members were equally impacted. Opt-out proceedings are predicted to encourage litigation funders to take on more cases. Removing the time-consuming step of recruiting plaintiffs and encouraging them to opt-in is a boon to funders. This is not expected to be the last refinement of class action laws in New Zealand. Steps are being taken to require registration and licensing for funders similar to what Australia requires.
Consumer

Tom Girardi and Wife Erika Jayne Sued for Embezzlement

Tom Girardi, the real-life Erin Brockovich lawyer, and his “Real Housewives of Beverly Hills” wife are being sued for embezzlement. They’re accused of misappropriating funds from the Lion Air crash settlement. Rather than giving the money to the victims, the couple is accused of using the funds in service of an “outrageous lifestyle.” Reuters details that Edleson, former counsel to the Girardis, learned from multiple conversations that the couple had not made good on payments to clients who had settled with Boeing. Instead, the funding went to creditors and litigation funders used by Girardi’s firm. The funders, California Attorney Lending, are codefendants in the suit, and deny that they received any money belonging to Girardi’s clients. The Girardi’s have recently announced plans to divorce, which some have asserted is an attempt to shield money from creditors. The lawsuit demands a full accounting of funds received from Boeing, and how that money was disbursed. The funds are to be paid out to clients, or failing that, put into a trust.
Commercial

Managing Revenue During Economic Downturn

More than ¾ of firm lawyers surveyed expressed concern about 4th quarter collections. More than half of firms have also stated a willingness to provide discounts in order to receive payments faster or to gain new clients. Meanwhile, realization rates are falling. Bloomberg Law details that there are steps firms can take to better manage cash flow. For most firms, hitting revenue targets is not optional. Legal funding provides non-traditional options by which funds can be raised to hit targets by year’s end. By selling client receivables in sets, that money can then be recorded as revenue. The financier who buys the claims then takes on the risk inherent in accounts receivable. The benefits of this type of arrangement are numerous. Using funders to provide immediate liquid allows firms to focus on growing their client base and on legal practice rather than on balance sheets. Finance providers also don’t interact with clients and therefore don’t conduct themselves as a debt collector would. It’s similar to traditional portfolio funding in that the risk is mitigated by the larger pool of accounts. This type of monetization is a legal sale, which means it can be reported as revenue. It can be put into the general fund or used to make partner payouts. The pricing will also improve all-around, as this kind of specialty finance provider generally offers more aggressive deals. Competition from new firms is cited as an ongoing challenge by more than 2/3 of lawyers. Simplifying the number of collections and incurring revenue by year’s end can create a certainty that’s sorely compromised due to the pandemic. The use of legal finance lends stability to firms while allowing for greater flexibility—which is especially useful in the current climate.
Commercial

Frydenberg Wins Fight to Maintain Litigation Funding Restrictions

Treasurer Josh Frydenberg is known for his zeal in regulating the litigation funding industry in Australia. He was instrumental in instituting new restrictions and mandates for those who engage in the practice, and for funders themselves—including a requirement that funders register as Managed Investment Schemes while holding AFSL’s. Financial Review explains that One Nation leader Senator Pauline Hanson plans to introduce new amendments in 2021. One expected change is that specific new rules should be negated provided that funders agree to give at least 70% of damages to plaintiffs. This led Shadow AG Mark Dreyfus to assert that Senator Hanson is in league with the government’s attempt to deny access to justice to Australians. The changes instituted by Frydenberg were ostensibly put into place so that funders would have similar accountability as banks. But admittedly, the government also wants to stop the rise in liability insurance rates and reduce the size and frequency of class action verdicts.
Commercial

Litigation Finance for Cases on Remand

We all know that civil litigation takes time. Some cases can take hundreds of thousands of dollars and years to reach completion. The average time for a civil case is on a steady rise, and COVID-related delays impact that even more. Omni Bridgeway details that they are typically approached about funding cases early in the process. But what happens when a case is remanded or goes dramatically over the allotted funds or time frame? That can stop even the most meritorious cases in their tracks. That’s when litigation funding can come to the rescue. When a dispute is remanded to a lower court, it’s an opportunity to employ litigation funding. Funders benefit from existing rulings, and the clarity added during the beginning of the legal process can only serve to benefit funders and clients. Sometimes a case that’s further along is more attractive to funders than a case that’s just getting off the ground. While many clients and even lawyers only consider funding from the outset of a case—there are steps along the way that could benefit from an influx of funding. When the merits are strong but the cash flow isn’t, litigation funding can make all the difference in who sees access to justice and who doesn’t.
Commercial

Oligarch Accused of Hiding Assets Following Divorce Settlement

Complaining that she has only received $7 million and an ill-kept helicopter, divorcee Tatiana Akhmedova was due to face her son Temur in court in an effort to gain the rest of her $600 million divorce settlement. This time, the asset in question is a $40 million London apartment. The Daily Beast explains that Akhmedova is accusing her son of helping his father hide assets after the divorce settlement. He in turn claims that the apartment was a birthday gift and that such gifts are not out of the ordinary in his family. Akhmedova’s legal team, funded by Burford Capital, was recently granted leave to search Akhmedov’s apartment for evidence of hidden assets. Temur Akhmedov claims he doesn’t want to “sound spoiled,” but is adamant that there’s nothing unusual about the expensive apartment or large cash transfers to him. He later complained about a court order restricting his weekly spending at around $4,000. Temur Akhmedov speaks well of his mother generally. But here, he has stated that she is bitter due to him taking his father’s side in the divorce. The elder Akhmedov claimed that he and his wife divorced in Russia more than two decades ago. His ex-wife claims that they reconciled, and a new divorce was filed later in London, leading to the record-setting settlement. Previous asset freezes are in place, including a super yacht. If the recovery is successful, Burford Capital will receive a portion of the recovery per their funding agreement with Ms. Akhmedova.
Announcements Commercial

KBRA Assigns Preliminary Rating to PEAR 2020-1

Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to one class of notes from PEAR 2020-1, LLC, an $80 million litigation finance ABS transaction serviced by Golden Pear Funding OpCo, LLC (“Golden Pear”). The PEAR 2020-1, LLC transaction represents Golden Pear’s first ABS collateralized by litigation finance receivables. Golden Pear is a litigation finance company that conducts business throughout the US but is concentrated primarily in the New York area. As of June 30, 2020, the company has funded over $626 million in aggregate advances dating back to 2008. The portfolio securing the transaction has an aggregate discounted receivable balance (“ADPB”), including assumed prefunding, of approximately $108 million as of the October 30, 2020 cutoff date. The ADPB is the aggregate discounted cash flows of the collections associated with the PEAR 2020-1, LLC portfolio’s litigation funding receivables. The discount rate used to calculate the ADPB is a percentage equal to the sum of the assumed interest rate on the notes, the servicing fee rate of 1.00%, and an additional 0.10%. As of the cutoff date, the receivables comprise pre-settlement litigation funding receivables with an average advance to expected settlement case value of approximately 13%. No post-settlement advances or medical lien receivables are included in the pool. The notes benefit from credit enhancement in the form of overcollateralization, a cash reserve account and a capitalized interest account. The transaction also features a $15 million prefunding account that may be used to purchase additional receivables during the three months after closing, subject to certain eligibility criteria. Click here to view the report. To access ratings and relevant documents, click here. Disclosures Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above. A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here. Information on the meaning of each rating category can be located here. Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com. About KBRA KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.
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